5 Differences in Buying and Selling in WA compared to the East Coast
Australia’s real estate markets are reflective of the country’s unique diversity across all parts of the country. Each state boasts unique legislation and market intricacies that significantly impact the buying and selling processes. Whether it’s the sales methods being used, the presence (or absence) of cooling-off periods, the differences in contract structures, the required deposit amounts, or the potential rental returns, the differences between Western Australia (WA) and the Eastern States are plain to see.
For buyers, sellers, and agents alike, understanding these differences is not just helpful but crucial in navigating the real estate market effectively. It’s about more than just making a transaction; it’s about securing the best possible outcome tailored to individual needs and circumstances.
Now, let’s delve into 5 distinctive features that shape the real estate scenes on both sides of the country.
How Properties Are Bought and Sold
One of the fundamental contrasts between buying and selling in WA versus the East Coast of Australia lies in the methods of property sales. In Western Australia, private treaty sales reign supreme, backed by standardised contracts endorsed by the Real Estate Institute of Western Australia (REIWA). This process, favoured for its consistency, allows buyers to include conditions such as subject-to-finance or subject-to-sale clauses in their offers, fostering negotiation flexibility and transparency.
Conversely, the Eastern States employ a mix of auctions and private treaty transactions. Auctions, a popular choice, provide certainty by mitigating the risk of ‘gazumping’, a tactic absent in WA. In these auctions, both buyers and sellers understand that once the hammer falls, the deal is sealed, offering assurance and clarity throughout the transaction process. This distinct difference in sales methods underscores the unique dynamics shaping real estate transactions on both sides of the country.
Availability of Cooling Off Periods
A fundamental discrepancy between buying and selling in Western Australia versus the East Coast of Australia revolves around cooling-off periods. While the Eastern States commonly incorporate a five-day “cooling off” window in private treaty sales contracts, such provisions are notably absent in Western Australia.
In states like New South Wales and Victoria, buyers often benefit from this grace period to reassess their decision and financial standing post-contract signing.
However, in WA, once the ink dries on the contract, both parties are irrevocably bound, providing sellers with a sense of certainty and security. Exceptions to this rule are only made when the buyer fails to secure financing, leading to the termination of the conditional sale.
This disparity underscores the distinct regulatory frameworks shaping real estate transactions on opposite ends of the country, influencing buyer and seller dynamics accordingly.
How Contracts Are Prepared
A significant distinction between buying and selling in Western Australia compared to the East Coast of Australia lies in the preparation of contracts.
In WA, the Real Estate Institute of Western Australia (REIWA) has developed standardised contracts widely adopted throughout the market. These contracts are regularly updated to reflect legislative changes, ensuring a streamlined and transparent process for both buyers and sellers.
On the contrary, the Eastern States often see sellers enlisting solicitors to create personalised contracts with terms favouring them. These seller-centric contracts may contain clauses that catch buyers off guard. To navigate these differences, WA buyers exploring eastern markets are advised to seek assistance from professionals familiar with the local contract nuances. This divergence in contract preparation underscores the unique approaches to property transactions on both sides of the country.
The Variance in Deposit Amounts
Deposit requirements serve as a notable point of divergence between property transactions in Western Australia and the Eastern States. In WA, buyers benefit from the flexibility of offering smaller sums as deposits, typically ranging between $10,000 to $20,000 in private treaty sales. This flexibility empowers buyers to maintain greater liquidity throughout the sales process, enhancing their financial maneuverability.
Whilst in Victoria or New South Wales, substantial deposits are often required, and this is commonly set at 10% of the property’s purchase price. For instance, on a $600,000 property, this would translate to $60,000, presenting a significant financial commitment upfront.
This is a rather significant difference, and demonstrates the varying financial obligations faced by buyers across state borders, with the deposit requirements in WA offering a more accessible entry point for prospective buyers, particularly for first-home buyers navigating their buying journey.
Return on Investment for Rental Properties
Rental returns serve as a crucial factor in investment decision-making, and the disparity between Western Australia and the East Coast is significant. WA’s rental market presents lucrative opportunities, particularly enticing for investors from the East.
Perth’s robust rental yields, fueled by remarkably low vacancy rates, attract investors seeking favourable returns. For instance, a property in Perth’s CBD fetching $650 per week in rental income may be valued at $450,000 to $500,000, whereas a similar property in Sydney could command well over $700,000.
This variance is significant and underscores how attractive investing in WA is, especially where investors can potentially secure higher returns on their investments. Understanding these nuances is essential for investors evaluating opportunities across regions, as rental returns play a pivotal role in the overall investment viability and financial outcomes.
Summary
In summary, while Australia’s real estate markets share some commonalities, the differences between WA and the Eastern states are evident and highly impactful. From sales methods to deposit requirements and rental returns, understanding these differences is pivotal for anyone navigating the real estate landscape.
Whether you’re a seasoned investor or a first-time buyer, being aware of these differences will empower you to make well-informed decisions and achieve your real estate goals confidently.
For further information, Vicki Philipoff Settlements is here to help, feel free to contact us today!
As Perth’s leading conveyancing and settlement agency we have conducted thousands of settlements for our satisfied clients. If you’re interested in our conveyancing and settlement services, email us today or apply for a free quote and Settle With Ease®️.
